Manufacturing Strategy for Window Fabricators 12 - Measurement
The traditional efficiency measures used in window fabrication are generally based on systems designed for a factory where direct labour and machine utilisation were the important factors. These measures such as:
Direct labour utilisation (and other measures).
Efficiency (however measured).
Machine utilisation measurements.
Materials usage measurements.
Variances of all the above.
These measures are concerned with doing tasks faster or with less material/labour and do not ask if you should be doing the task or not. They do not consider that you can be the most efficient slide rule manufacturer in the world but that won't help you if the market has moved on to pocket calculators or computers. Efficiency measurements such as these have little relevance to the shop floor and are generally treated by the average worker as unapproachable and a mystery. They ‘cannot’ be improved so why try?
Performance measurements must be relevant to the manufacturing area. The measurements must drive and improve the production process and relate directly to survival in the market place.
The measures must share common characteristics (shown in the box) and measurements meeting these criteria will drive a factory much more effectively than pure financial numbers. When these numbers are right then the financials will fall into place for both the short and long term.
Data collection should be done manually and the measurements should be recorded as the information is available on a blackboard or chart that is clearly visible to the factory staff . Ideally the production staff should collect and record the results to give them ownership of the numbers. Ownership and self-monitoring are powerful incentives to improvement. The public display of a measurement gives control, visibility and immediate feedback for the workforce.
The choice of the measurements to be used depends on the areas selected for improvement and this should relate back to the Key Factors for Success (KFS) established as part of the manufacturing strategy, i..e. what is it you need to be good at to improve or maintain your business? If quality is a KFS of the business then include a measure of quality in the measurements. If customer satisfaction or service is important then include a measure for this in the system.
Some examples of measurements are:
Supplier performance: lead times, incoming goods quality, certification.
Cost of quality or quality index.
Customer satisfaction: Surveys, complaint recording, repeat sales.
Customer Time Measures
Number of products (line items) delivered on schedule.
Value of products delivered on schedule.
Lead time reduction improvements.
Total product processing (cycle) time.
Total product distance traveled.
Machine down times.
Number of handling operations.
Direct labour productivity: value of finished products divided by number of hours to make.
Reduction of non value-added production steps.
These are just a few measurements that you could use. The important thing is to decide where you need to get better and then measure that area. Choose the measurements that control production effectiveness and use these until the concerns that they measure are under control, then move on to the next most important improvement areas.
Presentation at management level can use a ‘management dashboard’ (see box at right) presenting the measurements as on a car dashboard. Progress and achievements (non-financial) will be clear and unambiguous.
The measurements used and progress made will show the improvements and automatically drive the factory to improve.
If good materials are purchased and the internal processes are in control then outgoing quality is automatically good. The measurement of quality can then be changed from outgoing quality to control of incoming quality. If quality is controlled at all levels then it is possible to move on and treat customer responsiveness as the major priority. Focusing on flexibility and short lead times gives rapid customer order turn-around. Ant company still worried about quality in 2004 will soon be outflanked by competitors using responsiveness and time as a competitive weapon.
Performance measurements must reflect the competitive priorities (as defined by the KFS) and the new competitive weapons are simple: reliable products (as distinct from products that simply conform to specification as they leave the factory) and quick dependable delivery. Only by reflecting these priorities in the measurements will companies survive.
Measurements displayed on the 'company dashboard' are easy to understand, can be changed rapidly and show progress (or lack of progress quickly). Limit the number of measures and change them as the objectives are achieved.
People all react in the same way, if a worker is told that quality is all important and is then measured according to his production output then what will he concentrate on improving.
People react in the way you inspect and not in the way you expect.
People react in the way you audit and not in the way you plaudit.
Above all measure, display, analyse and act to improve the results
1. They should be clearly communicated to the
‘I will succeed if you tell me what you want me to do and where you
want me to improve’.
2. They should be non-financial and used by all
‘Tell me in terms I can understand’.
3. They should reflect the performance required at
‘Give me something that is relevant’.
4. They should vary with time to reflect changing
goals in the organisation:
‘I've got that right so let’s move on to the next priority’.
5. They should be simple and easy to use:
‘I understand that’.
6. They should be fast to give quick response and
‘Is today soon enough?’.
7. They should aim to teach rather than monitor and be
designed for improvement rather than simple historic reporting:
‘OK, now I see where I can get better’.
Characteristics of the new effectiveness measures.
The 'Manufacturing Strategy' series is designed to give window fabricators a set of ideas for managing production. The series is being published in Fenestra on a monthly basis and published here after the Fenestra publication. The series is:
Part 1: The Essential Part
Part 2: The Systems
Part 3: Just-in-Time
Part 4: Optimised Production Technology
Part 5: Work Cells
Part 6: Machines
Part 7: Machines (2)
Part 8: Scheduling
Part 9: Waste (Methods)
Part 10: Waste (Materials)
Part 11: Supply Chain
Part 12: Measurement
Part 13: Things to do NOW!
Part 14: The Cost of Quality
Part 15: The Hidden costs of inventory
Part 16: Environmental management
Part 17: Continuous Improvement
Last edited: 21/02/12
© Tangram Technology Ltd. 2004
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